Nvidia Corporation’s GB200 server cabinets, along with cloud service providers’ (CSP) servers powered by their in-house ASIC chips, are increasingly adopting liquid cooling technologies. This shift is expected to significantly boost the cooling module supply chain for AI servers starting in late 2025 through 2026, prompting major manufacturers to expand production capacities in Southeast Asia.

China’s semiconductor industry continues to expand capacity in mature process chips while strengthening self-production of AI chips, especially as the Chinese AI sector gained momentum with the debut of DeepSeek. Due to ongoing US restrictions on semiconductor exports to China, Nvidia’s AI chips have become unavailable. Although Nvidia’s H20 chips were recently conditionally approved by the US government, Chinese authorities are fostering an environment that discourages the use of H20 within China.

The 20% reciprocal tariff imposed by the United States on exports from Taiwan officially took effect on August 7, 2025, covering most traditional industries. The impact varies across sectors depending on industry characteristics, product types, and competition from other countries. Higher prices quoted to US customers have already led to noticeable order declines for machine tools, hand tools, and plumbing hardware.

The impact of reciprocal tariffs on Taiwanese industries continues to mount, with concerns spreading across key sectors. Young Liu, Chairman of Hon Hai Precision Industry Co. (Foxconn) and head of the Taiwan Electrical and Electronic Manufacturers’ Association (TEEMA), said during a board meeting on August 18, 2025, that roughly 25% of the association’s members are experiencing significant disruption.